Construction & Real Estate

From 2008 to 2012, the construction sector posted average real annual growth of 20.4%. The value of construction projects in 2013 was estimated at $1.4bn, up from the $1.2bn in 2012, $984m in 2011 and $744m in 2010. A host of big-ticket items are listed in the 2014 budget, including $577m to construct and maintain roads and bridges; $152m to finish facilities for the 2015 Pacific Games; $25m for housing and land development; $91m for university infrastructure; and $109m for hospital redevelopments. Although there has been some sector deceleration, much of this is being offset by a substantial surge in government outlays for infrastructure. Meanwhile, growth in property values is slowing and demand is starting to cool as the unprecedented property demand surge prompted by the Papua New Guinea Liquefied Natural Gas (LNG) project has begun to subside. This decline has led to market correction in certain areas, but some real estate categories have been affected more than others. With an estimated 28% of the urban population in PNG living in informal settlements, the government has been rolling out a number of policy changes to reduce this figure to 15% by 2030. One industrial development that could become a game changer received new life in 2013: the prospect of moving forward with the long-dormant Konebada Petroleum Park. Any rebound in the kina should help stabilise property prices, with real GDP projected to grow through to 2018 as revenues from PNG LNG and other resource extraction projects begin to materialise in late 2014. This chapter contains interviews with Francis Awesa, Minister for Works and Implementation; Stuart Bowman, Country Manager & Director, Leighton PNG; and James Lau, Managing Director, Rimbuna Hijau (PNG) Group.

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